Investment loan overview

What exactly is an investment loan and how does it differ from a regular home loan?

An investment loan is a mortgage solution suitable for those who have bought an investment property to rent out for a profit, but cannot afford to buy the property without a loan. Investment loans are structured differently from your standard home loans because they have much stricter eligibility requirements. For example, investment property loans often require a higher loan-to-valuation ratio (LVR) which means that investors need to raise a larger deposit before applying for the loan. Investment loans also tend to have slightly higher than average interest rates compared to standard home loans.

When it comes to choosing an investment loan, there are three key areas you need to consider: the investment home loan rates, where you are getting your property investment advice and who your property investment strategist will be.

Investment property loan advice

We are all about you achieving your financial goals. Whether you are a first-time investor looking to secure a small investment property or a property investment veteran looking to diversify your portfolio and grow your wealth rapidly, we offer custom solutions to suit your needs.

For many, an investment property is an investment for the future. In order to increase your future wealth and financial security, you need to feel confident that the advice you are relying on has your best interest at heart.

There are many factors to consider when it comes to purchasing an investment property and considering an investment loan. A few important considerations include:

Knowing your budget and staying within your spending limits.

Not underestimate ongoing costs as these can add up quickly.

Remembering not just to look in popular neighborhoods but also considering up and coming areas to get the most bang for your buck.

Considering your current home loan and ensuring you are not taking on another loan too quickly and jeopardising your financial security.

For more in-depth property investment advice, contact us for a free, no-obligation chat with one of our experts.

Investment home loan rates

We are going to be straight with you; investment property loans tend to have slightly higher interest rates when compared to standard home loans.

However, as an investor, it is important to consider more than just interest rates, as there are several other home loan fees and costs involved.

When it comes to finding a loan, most investors concentrate primarily on finding a cheap loan rate but, with any loan, especially an investment property loan, it is important to consider and compare the following key areas as well:

Early Exit Fee: this is charged if you pay out your loan within a certain time frame and is also called an early termination fee.

Discharge Fee: this also known as a termination or settlement fee and kicks in when you pay your loan in full.

Break Fee: this is charged if you decide to switch from a fixed rate loan to another loan before the end of the agreed upon period.

Establishment Fee: this is also known as a startup fee and is a one-time payment when you begin your investment loan.

Ongoing Fee: this is also referred to as a service fee or administration fee and is charged monthly to cover the administrative costs associated with your loan.

Lender’s Mortgage Insurance: this cost covers the insurance for the credit provider in case you cannot repay the loan.

With so many different options to consider, it is often helpful to consult an expert to help you navigate through the investment loan landscape. There are also many helpful comparison websites and tools available, such as our Loan Comparison Calculator.

Property investment strategist

In a world where we have an infinite source of information at our fingertips, you would think that it would be easy to get good advice. However, transparency can be hard to find and as an investor, you need to be aware of hidden costs.

The internet does not filter out the reliable information for you, and with every lender out there trying to win your business, finding a company you can trust is often hard – let alone finding property investment advice that is tailored to your specific needs and circumstances.

Our property Investment Strategists believe in building lasting professional relationships by taking a hands-on approach with each client to ensure you never feel like you are just another account number. Our Investment Strategists will work with you to recommend property investment opportunities, deliver in-depth and highly researched information that meet your specific needs and implement sound investment strategies to assist you in your long-term wealth creation.